GS is not alone with forecast on high oil-prices: Morgan Stanley forecast oil prices trading at $110 in 2010: http://www.liveoilprices.co.uk/oil/oil_trading/01/2010/morgan-stanley-forecast-oil-prices-trading-at-110-in-2010.html

From canada today:Oil industry's profits are set to rebound, Conference Board says.

EDMONTON - Higher prices and production will drive revenues to outpace costs, pushing pretax profits in Canada's oil-extraction industry to $8-billion this year, the Conference Board of Canada said on Thursday.

But while this is a 66% increase from 2009 levels, the board noted in its latest industrial outlook that this level is well below the industry's 2008 peak.

"Higher prices have prompted increased investment in non-conventional activities," said board economist Todd Crawford. "However, weaker conventional production and rising cost pressures mean industry profits will not return to pre-recession levels until the end of the forecast, in 2014."

Oil prices have risen significantly over the past 12 months, but remain well below their record highs of 2008.

Global demand will continue to grow over the forecast, putting upward pressure on prices, said the board, with oil prices forecast to increase to US$114 by 2014.

The board said that given the current forecast for oil prices, Canadian companies are expected to invest significantly in non-conventional production capacity, which is expected to grow by 6.7% this year and continue to expand over the forecast period, reaching 2.1 million barrels a day by 2014.

Industry revenues are expected to increase an average of more than 14% annually over the next four years, thanks to steady production growth and rising prices.

However, rising material and labour costs in Western Canada will slow the industry's pace of recovery in profitability, the board concludes.

Canwest News Service

Read more: http://www.financialpost.com/related/topics/story.html?id=2698261#ixzz0iZXsr6J3
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